Online sales tax bill jeopardizes tax-free shopping

WASHINGTON — The Senate is taking up a bill that would allow states to collect sales taxes for online purchases.

Under current law, states can only require stores to collect sales taxes if the store has a physical presence in the state. As a result, many online sales are essentially tax-free, giving Internet retailers a big advantage over brick-and-mortar stores.

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The Senate has scheduled a procedural vote Monday on the bill. If the vote is successful, the Senate could pass the bill as early as this week.

Supporters say the bill is about fairness for businesses and lost revenue for states. Opponents say it would impose complicated regulations on retailers and doesn't have enough protections for small businesses. Businesses with less than $1 million a year in online sales would be exempt.